The Financial Cost of Not Training Your Employees
April 30, 2020
Image from https://unbridlingyourbrilliance.com/great-leaders-develop-their-people-what-development-entails/
At TalkMeUp, we’re big on companies providing communication training to their employees. We believe the most successful companies know how to facilitate positive conversations internally within their teams and externally with customers.
Unfortunately, many companies still do not make the necessary investments to develop their talent, leaving invaluable opportunities on the table.
Here are a few reasons why your company should start training today if it isn’t.
The best performing companies invest in training.
An IBM study looked at the best performing and worst performing companies to see if training and new skills acquisition had anything to do with the performance gap. Unsurprisingly, 84% of the best performing organizations are delivering the training they need, a full 68% better than the worst performing companies.
The study also found that the amount of training does not need to be significant. Employees that received 40 hours of training met their job objectives three times as often as employees that received 30 hours or less.
Employees that aren’t trained leave.
Over 35% of millennials consider comprehensive training and development programs as a key factor in their decision to work for a company. Companies that cannot meet this expectation risk producing untrained, unsatisfied, and unfulfilled employees that are looking for the right exit opportunity. One IBM study showed that employees that feel they cannot develop in the company and fulfill their goals are 12 times more likely to leave.
Training and retaining employees is cheaper than making new hires.
It’s difficult to calculate the real cost of losing an employee, but studies have shown it costs 6 to 9 months’ salary on average. That’s due to the 3 major costs of employee turnover: separation costs (e.g., severance, insurance claims); recruitment costs (e.g., job promotion, interviewing); and productivity costs (e.g., the opportunity cost of a vacant position).
Instead of bearing the cost of a lost employee, employers should proactively invest in proven retention strategies like development and training to continue to make their company a compelling place to work. This is not only good for employees, but employers too.